Let Them Be People!

Beware, dear reader, my economist self is on the warpath, but I think this is worthy of your attention. The ongoing move for corporate personhood is even more persistent than the pressure for fetal personhood, dating back to the 19^th  century. At least fetuses and their advocates are not asking for free speech or lower tax rates. Yes, corporations can’t vote, but the Koch brothers and others are working hard to ensure that fewer humans have that privilege either by funding a rash of voting restrictions. Especially those humans—people of color and young people—whose voting patterns are not favorable to corporate interests. Corporations use the “money is speech” defense approved by the Supreme Court in Citizens United to influence elections.

Corporate persons are owned by actual humans, known as shareholders, which might be regarded as a privileged form of slavery. However,corporations actually enjoy several privileges not available to actual living human beings, including limited liability and the prospect of eternal life. (Not in heaven, but on earth.) Corporations are also absolved of some responsibilities that affect actual humans. Unlike humans, they are not subject to the military draft. Bankruptcy is much easier for corporations that for real people, especially those with student loan debt. Corporations have managed to get Americans to accept the fiction that their sole responsibility to society is to maximize shareholder wealth (another form of slavery), which is a misreading of a 1930s Supreme Court case protecting minority shareholders in a battle bet ween Henry Ford and the Dodge brothers.

Corporations can play local and state governments off against each other in a race to the bottom—bottom meaning tax breaks and other incentives in exchange for the promise of jobs. They pay lower federal income taxes than most human citizens. Profitable corporations paid U.S. income taxes amounting to just 11.3% of their worldwide net income in a 2019 study reported in Fortune. That low rate reflects the 2017 tax cut directed mainly at corporations and wealthy Americans who own them.  For humans, the average effective federal income tax rate is 14.7%. Corporations have access to many ways of avoiding taxes with offshore tax havens, shifting profits to subsidiaries, and a wide range of deductible business expenses that are thinly disguised perks for board members and senior management.

Yes, I know about the argument that corporate profits are taxed twice, once at the corporate level and again when shareholders receive them, although some dividends are excluded and capital gains are taxed at a lower rate.  But workers—despite robotics, most workers are actual living breathing people—are also taxed twice on the same income.  They pay social security taxes on their wages and income taxes on the same wages, so even just counting the part of the social security tax paid by the employee, that average individual tax rate jumps to 22.3%.

So…if they want them to be people, let’s treat them like people.  People expire. Corporate charters should not be in perpetuity. Bankruptcy should be just as difficult and consequential for corporations as for real people, not just a tool of financial management. In case of war, corporations could be conscripted to provide resources for defense.   Their tax liability should be equal to that of real persons, not less, and their tax dodges should be carefully scrutinized by an adequately funded IRS. Politicians should have to divulge where money comes from for their campaigns without laundering it through several washings so that sources cannot be easily traced.

Brother and sister corporations, welcome to the human family, with all the rights, privileges, and RESPONSIBILITIES appertaining thereunto.